Housing market still "treading water"
Average house prices increased by 0.4% in October, and by 0.8% over the last year but the outlook for the UK property markets remains "uncertain", according to Nationwide's latest house price index.
This month marked the first annual increase in six months, but despite this Nationwide's chief economist Robert Gardner says the market is still "treading water".
"Given the challenging economic backdrop, October's data is encouraging, but it doesn't fundamentally change the picture of a housing market that is treading water," he says.
"The outlook remains uncertain, but with the UK economic recovery expected to remain sluggish, house price growth is likely to remain soft in the period ahead, with prices moving sideways or drifting modestly lower over the next twelve months," Gardner adds.
Nicholas Ayre, director of the property buying agency Home Fusion, says the housing market is "hanging on for dear life".
"It says much about how bad things have got for such a relatively small uptick to seem like good news.
"Average prices have finally recovered to where they were at this time last year. But that can't mask the fact that the number of sales is still paltry and the market is essentially stagnant," Ayre adds.
Rich and poor divide
Nationwide's latest survey also reveals a growing divide in house price activity between affluent and poorer areas. Since 2008, the number of house sales has gone up by 3% in areas classified as ‘wealthy achievers' and up by 1% in ‘comfortably off' areas. In contrast, the proportion of house sales in ‘hard pressed' areas has fallen by 2%.
"This is not surprising, given the deterioration in economic conditions which is likely to have hit these areas hardest," says Gardner.
‘Hard pressed' areas are characterised by lower household incomes and lower levels of educational achievement and are often found within inner cities and post industrial towns.
Nationwide's figures come a day after Land Registry statistics revealed that house sales in England and Wales are 11% down on last year's figures.